1、M IdeaAsia Economics|Asia PacificThe Viewpoint:India-China Trade Where Do We Go From HereWe expect further expansion in the bilateral trade between India-China given economic imperatives.India needs support on tech know-how,capital goods and critical inputs and China needs to capitalize on growth op

2、portunities in the 2nd largest and fastest growing EM.Morgan Stanley Asia LimitedChetan AhyaChief Asia Economist Chetan.A +852 2239-7812 Morgan Stanley Asia(Singapore)Pte.Derrick Y KamAsia Economist Derrick.K +65 6834-8272 Morgan Stanley Asia LimitedJonathan CheungEconomist Jonathan.C +852 2848-5652

3、 Kelly WangEconomist Kelly.W +852 3963-0891 In this report,we are taking a deep dive into the India-China trade and investment relationship,how it has evolved and where it is headed.For important disclosures,refer to the Disclosure Section,located at the end of this report.Key TakeawaysIndias bilate

4、ral trade deficit with China is its largest,while Chinas trade surplus with India is the largest amongst Asian economies.As India looks to integrate itself into the global manufacturing value chain,China will be pivotal to this effort.China can provide India with FDI(and technological know-how),crit

5、ical inputs and the capital goods that India needs to rapidly industrialize.India,as the 2nd largest and fastest growing EM,will be a key source of end demand for Chinas exports.While economic imperatives should mean a deeper trading relationship,the key risk is if geo-political developments were to

6、 slow the progress.September 1,2025 11:59 PM GMTM Idea2Details Sizing up China and Indias trade relationship:Indias trade deficit with China is the largest amongst its trade partners.At the same time,Chinas trade surplus with India is the 3rd largest overall but the largest within Asia.However,FDI f